Divorce Later in Life Leaves Women Working Longer

Weathering a divorce has long-lasting effects on all parties involved. Along with the emotional costs, it can take some time to rebuild one’s financial security. A study from Boston College and Mathematica Policy Research finds that divorcing later in life can significantly impact the ability to retire. Based on the findings, women especially are less likely to retire early.

The Research

Information included in the findings covers more than 55,000 women and spans from 1986 to 2008. Pulling data from such a large number of women helped researchers include the divorce peak of the 1980’s. Including multiple generations helped determine the financial impact on women, including their ability to retire.

Women who have gone through a divorce at any point in life are working longer in life. However, those that separate before the age of 30 are 10 percent less likely to work full time once they reach retirement age. Much of this is attributed to time. Dividing finances so late in life gives women much less time to build their own retirement savings. The other factor, researchers found, was women choosing to focus less on building their own wealth as they raised a family. Many never expected to divorce after reaching age 50.

Men and Women Suffer Differently

Every situation is different, however the numbers do show a difference in how men and women recover financially. Just over 11 percent of men that divorce after 50 are living in poverty. Women in the same situation suffer much worse; nearly 27 percent that divorced later in life are impoverished.

Part of the difference can be attributed to differences in career paths, salaries, and individual wealth-building already discussed. It gets tougher for women when children are involved in a divorce. Women maintaining custody will often sacrifice assets, including retirement savings, in order to keep their family home. This tradeoff, combined with the low Social Security payments for single people, leads women who are divorced later in life working into retirement age.

Today’s Impact

The overall divorce rate is trending downward, though it has remained relatively consistent for some time. However, the trends continue to show that older generations are divorcing at a higher rate than younger people. As explored recently, nearly a quarter of today’s divorces are among the older generation; 15% of people over 50 are divorced.

While divorce lawyers work with an increasing number of cases involving older couples, this study shows the trend could leave a lot of women suffering financially in the future. In areas such as Grand Rapids with a growing number of older women, a divorce later in life could leave more of them working much longer than originally planned.

Dennin, J. (2016, October 19). Divorce can hurt your retirement- especially if you’re a woman, study finds. Retrieved on October 19, 2016 from https://mic.com/articles/157112/divorce-can-hurt-your-retirement-especially-if-youre-a-women-need-to-save-more-separate-accounts#.9FF7RHJSX

Steverman, B. (2016, October 17). Divorce is Destroying Retirement. Retrieved on October 19, 2016 from http://www.bloomberg.com/news/articles/2016-10-17/divorce-is-destroying-retirement